Ajay Shah thinks the new pay commission report has made only ‘tiny progress’ in increasing the inequality in wage levels between junior and senior government workers:

How do I know so clearly that at junior levels, salaries in government are 2x to 3x too high? Some time after I left the Ministry of Finance, one day, I encountered a chap who had once been my driver while I was there. I asked him how he was faring and he said things were not good at all. He had been assigned to a certain JS who was not nice to him. So he outsourced his job. The government pays a driver perhaps 3x higher than the public market price of a driver. So my ex-driver recruited a driver from the public market, sent him in to work every day in his place, and pocketed a neat profit off the wage differential (even after some money was paid to people in the payroll department to keep them quiet).

Sauvik Chakraverti strongly opposes pay hikes for the ‘misproductive bureaucracy’

This reminds me of the time when the 5th Pay Commission met over a decade ago. Then, an officer of the Indian Administrative Service named Srivatsa Krishna wrote an article in The Economic Times quoting Lee Kwan Yew’s dictum “If you pay peanuts, you get monkeys”. His argument was that IAS blokes like him must be very highly paid.

I was a regular contributor to the editorial pages of ET then, and wrote a rejoinder titled “Monkeys Deserve Peanuts”. It provoked wide outrage in the IAS mafia and a flurry of letters to the editor followed. Unfortunately, this was in the pre-digital era, and no electronic records exist. But I can mail photocopies to anyone interested.

Of course, my arguments were correct.

Vivek feels ’salary is only one of the overall set of issues that need to be sorted out’. More important are performance-linked incentives and right-sizing the bureaucracy:

I have a relative – a young architect – who is married to an engineer working in the Railways. She told me that her husband had a staff of 10 people who had absolutely no work to do and were therefore unofficially designated as his domestic help. She didn’t know how to gainfully employ these people at home either. On being coaxed by the husband, who was tired of having these people sitting around, she tried to keep them busy at home: one person to water the plants in the morning, one in the evening, one person to wash the car in the morning, one in the evening, one person each to prepare breakfast, lunch, and dinner, one person to carry the lunch-box to office, one to buy groceries.. you get the idea. In just a couple of days, she got sick of the whole thing and told the husband to take all of them away and find another solution. The solution, of course, doesn’t exist.